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TMI Blog2015 (2) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in Clause (a), it cannot be said that the interest is payable from the 1st of April of the assessment year. Simultaneously, since the said payment is not made pursuant to a notice issued under Section 156 of the Act, Explanation to Clause (b) has no application. In such cases, as the opening words of Clause (b) specifically referred to "as in any other case", the interest is payable from the date of payment of tax. - Decided in favour of Assessee. - INCOME TAX APPEAL No. - 49 of 2007 - - - Dated:- 26-2-2015 - Sudhir Agarwal Shashi Kant, JJ. for Appellant :- A.N.Mahajan, Shambhoo Chopra for Respondent :- R.S. Agrawal ORDER 1. Heard Sri Shambhoo Chopra, Advocate, for appellants-Department and Sri Rupesh Jain, Advocate, holding brief of Sri R.S. Agarwal, Advocate, for respondent-Assessee. 2. The two substantial questions of law, which have been formulated by appellants, i.e., Department of Income Tax, in this appeal filed under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as Act, 1961 ) relate to validity of interest allowed by Commissioner of Income Tax (Appeal) (hereinafter referred to as CIT(A) ) under Section 244A of Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Explanation: For the purposes of this clause, date of payment of tax or penalty means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand (emphasis added) 5. Section 244A(1)(a) of Act, 1961 is applicable in respect to the cases where tax has been paid or collected under certain Sections mentioned therein, i.e., Section 115 WJ, 206C and 199. However, Section 244A(1)(b) applies in all remaining cases which obviously would include within its ambit Section 140A also. 6. Since we have to consider applicability of the aforesaid provision vis-a-vis Section 140A, it would also be appropriate to reproduce Section 140A of Act, 1961 which reads as under: Self-assessment. 140A. (1) Where any tax is payable on the basis of any return required to be furnished under section 115WD or Section 115WH or Section 139 or Section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account,- (i) the amount of tax, if any, already paid under any provision of this Act; (ii) any tax deducted or collected at source; (iii) any relief of tax or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is taken into account in computing such total income. (ii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (iii) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (iv) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD. (2) After a regular assessment under section 115WE, or section 115WF or section 143 or section 144 or an assessment under section 153A or section 158BC has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment or assessment, as the case may be. (3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assesse in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this Act shall apply accordingly. (4) The provisions of this section as they stood im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na High Court's decision in Punjab Chemical And Crop Protection Limited (2015) 370 ITR 481; and, Bombay High Court's decision in Stock Holding Corporation of India Limited Vs. N.C. Tewari, Commissioner of Income Tax 2015 (53) Taxman.com 106. 8. In Sandvik Asia Ltd. Vs. Commissioner of Income Tax, 280 ITR 643, the Court said that under statutory provisions of Act, 1961, an Assessee is entitled to compensation by way of interest for delay in payment of amount lawfully due to Assessee, which are withheld wrongly and contrary to law. The Government is liable to pay interest at the applicable rate on the excess amount refundable to the Assessee. 9. In Commissioner of Income Tax Vs. H.E.G. Ltd. (2010) 324 ITR 331 (SC), the Court said that the expression refund on any amount would include interest under Section 244A (on refund of tax deducted at source) to which Assessee was lawfully entitled but had been wrongly withheld by the Department. 10. We are also informed that judgment of Madras High Court in Commissioner of Income Tax Vs. Cholamandalam Investment and Finance Company Ltd. (supra) attained finality after dismissal of S.L.P. No. 16877 of 2008 on 3.12.2009. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld section an Assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an order passed under the Act, including the order passed in an appeal. In the present fact scenario, the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid. The amount paid by the resident/deductor was retained by the Government till a direction was issued by the appellate authority to refund the same. When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorizedly by the Department. When the collection is illegal, there is corresponding obligation on the revenue to refund such amount with interest in as much as they have retained and enjoyed the money deposited. Even the Department has understood the object behind insertion of Section 244A, as that, an assessee is entitled to payment of interest for money remaining with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund of tax deposited Under Section 195(2) of the Act, but has to be refunded with interest from the date of payment of such tax. 14. In the result, both the questions are answered against Revenue and in favour of Assessee. 15. We find that in this particular case, virtually questions of law which have been sought to be raised, are specifically covered by Section 244A of Act, 1961 and a bare reading thereof makes it very clear, still in a mindless manner, this appeal has been filed. It is very painful that Income Tax Department does not exercise restraint in deciding as to in which cases it should contest the matter in higher Courts and is flooding cases by filing frivolous appeals, though as a matter of fact, the formulated substantial questions of law are such which have already been answered by various High Courts and many a times by Apex Court also and, therefore, in such matters, it was not open to the Department to re-agitate the same issue repeatedly. 16. This appeal, in our view, is totally frivolous and nothing but a harassment to the Assessee also. We therefore, dismiss this appeal with cost which is quantify to ₹ 10,000/-. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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